Question 1

It is important for franchisors to specify rigid operations standards and to restrict choice of suppliers so that _____.
A)franchisors can receive operating revenues
B)financial resource requirements for franchisees can be limited
C)a uniform image can be presented to customers regardless of location
D)a professional manager system can be utilized

Accepted Answer

By specifying rigid operations standards and restricting the choice of suppliers, franchisors can ensure that a uniform image is presented to customers regardless of location. This is an important aspect of franchising as it helps to establish brand recognition and maintain consistency in quality and customer experience. It also helps franchisees to quickly and efficiently implement the franchise system, reducing the risk of errors and improving profitability.

Question 2

Which of the following retailers is most likely to use market share as an objective?
A)national discount store chain
B)neighborhood luncheonette
C)a local dry cleaner
D)new car franchise

Accepted Answer

National discount store chains typically aim to capture as much market share as possible by offering low prices and attracting high volumes of customers.

Question 3

Intensive owner participation in a business is most likely to occur when _____.
A)a retailer is well-capitalized
B)delegation of work to others will diminish consumer loyalty
C)a firm has strong financial controls
D)store hours are long

Accepted Answer

When a business owner believes that delegation of work to others will negatively impact consumer loyalty, they are more likely to be involved in daily operations and decision-making. For example, a small mom-and-pop store may have a loyal customer base that values personal interactions with the owner, and the owner may choose to be heavily involved in the business to maintain those relationships.

Question 4

An integral component of any differentiated marketing strategy is _____.
A)a unique set of product/service offerings to each customer group
B)an overall company-based integrated strategy
C)coordination of retailing strategy across units
D)geographic differentiation to meet customer needs

Accepted Answer

Differentiated marketing involves creating unique offerings that cater to the specific needs and preferences of different customer groups. Therefore, having a unique set of product/service offerings to each customer group is a crucial component of this strategy. The other options are important considerations in overall marketing strategy, but they are not specific to differentiated marketing.

Question 5

Stockholder satisfaction is an important objective for a retailer using which ownership and management alternative?
A)corporation
B)partnership
C)sole proprietorship
D)franchise

Accepted Answer

Stockholders are owners in a corporation and receive dividends based on their stock ownership. Therefore, ensuring stockholder satisfaction is a crucial objective for a corporation. In other ownership alternatives such as partnerships, sole proprietorships, and franchises, there may be no stockholders or a different ownership structure, making stockholder satisfaction less relevant.

Question 6

A major retailer studied the image of two of its units,a discount specialty store chain and an upscale specialty store chain,using a positioning map technique.Both of these units' images were clustered in the same quadrant.Which statement best explains this phenomenon?
A)Each chain has a distinct image.
B)Both chains appeal to the mass market.
C)Both chains appeal to the same target market.
D)Both chains are perceived as being upscale.

Accepted Answer

The fact that both of these units' images were clustered in the same quadrant indicates that they appeal to the same target market. This means that the perceived customer base for both the discount specialty store chain and the upscale specialty store chain is likely to be similar, despite the fact that they may have different brand images or marketing approaches. It is possible that both chains are offering different levels of product quality or customer service, but their target customers may have similar demographic, psychographic or behavioral characteristics, leading to this overlap in their market positioning.

Question 7

A retailer attempting to improve its selling efficiency from 60 percent to 70 percent reduced its selling expense budget from $400,000 to $300,000.However,its new selling efficiency was reduced to 50 percent.What happened?
A)Sales decreased from $1,000,000 to $500,000.
B)Sales decreased from $1,000,000 to $600,000.
C)Sales decreased from $1,000,000 to $700,000.
D)Sales increased from $1,000,000 to $1,250,000.

Accepted Answer

The retailer's original sales level was $1,000,000 (60% of selling efficiency). They reduced their selling expenses from $400,000 to $300,000 in an attempt to improve selling efficiency to 70%. However, their new selling efficiency was only 50%. To calculate the new sales level:
New sales level = (New selling efficiency / Original selling efficiency) x Original sales level
New sales level = (50% / 60%) x $1,000,000
New sales level = $833,333
This is a decrease from the original sales level of $1,000,000. Therefore, the best choice is B, "Sales decreased from $1,000,000 to $600,000."

Question 8

Which of the following is an example of a controllable variable to an independent family-oriented shoe retailer?
A)consumer acceptance of the store's above-average pricing strategy
B)development and implementation of a cheerful,friendly store atmosphere
C)competition from a new family-oriented shoe chain with below-average pricing
D)high seasonality during the week before school,at Easter,and before camp time periods

Accepted Answer

A controllable variable is a factor that a company has direct control over, and can be changed or adjusted as needed. Of the options given, the only factor that is directly controllable by the independent family-oriented shoe retailer is the development and implementation of a cheerful, friendly store atmosphere. The other options are external factors that the retailer has little to no control over.

Question 9

An advantage of a centralized management structure to a retail chain is _____.
A)better training opportunities for branch personnel
B)more autonomy to each branch manager
C)more uniform store image
D)better ability to adapt to individual markets

Accepted Answer

A centralized management structure allows for greater control over store design, advertising, and merchandising, resulting in a more uniform store image across all locations. This can lead to higher brand recognition and customer loyalty.

Question 10

The division of authority and responsibility in a major retail organization by product categories and geographic areas illustrates a(n)_____.
A)centralized structure
B)decentralized structure
C)professional manager system
D)owner-manager system

Accepted Answer

The division of authority and responsibility by product categories and geographic areas indicates a decentralized structure, where decision-making is spread out among different departments and locations.

Question 11

A heavily diversified retailer requires _____.
A)a separate retail strategy for each major retail business unit
B)a uniform strategy so that each retail business unit has a common image
C)a centralized organization structure for all key functional areas
D)the use of a mass marketing strategy

Accepted Answer

A heavily diversified retailer operates multiple business units with different products, target markets, and competitive environments. Each unit requires a unique retail strategy that aligns with its objectives, capabilities, and customer preferences. A uniform strategy may lead to suboptimal performance for some units, while a centralized structure may not allow adequate flexibility and responsiveness to local market conditions. A mass marketing strategy may also be inefficient and ineffective in reaching diverse customer segments. Therefore, different retail strategies should be developed and implemented for each major retail business unit.

Question 12

An advantage of buying an existing business versus starting a new business is _____.
A)the ability to generate new supplier relationships
B)the ability to generate immediate sales
C)no cost for goodwill
D)flexibility in developing and changing retail strategy

Accepted Answer

Buying an existing business means inheriting an established customer base and generating immediate sales, whereas starting a new business may take time to build brand recognition and attract customers.

Question 13

A retailer that sells to multiple segments should use which management alternative?
A)professional manager system
B)decentralized structure
C)owner-manager system
D)centralized structure

Accepted Answer

A decentralized structure allows for more autonomy and decision-making power at the segment level, which is beneficial for a retailer selling to multiple segments. It allows for flexibility and adaptation to the unique needs and preferences of each segment. A centralized structure may not be as effective in managing multiple segments as decisions and strategies may not be tailored to each segment.

Question 14

A discount department store aims its retailing strategy at a large homogeneous (similar)group of consumers.A wide assortment of goods is offered at popular prices.The retailer utilizes which target market strategy?
A)mass marketing
B)market segment
C)multiple segmentation
D)store positioning

Accepted Answer

The retailer is using mass marketing, which targets a large, homogeneous group of consumers with a single marketing mix.

Question 15

While a differentiated marketing strategy allows a firm to diversify,a major difficulty associated with differentiated marketing is _____.
A)the need to create and maintain distinct images
B)that a market segment may be cluttered
C)that competition is increased
D)that one market plan may not adequately cover both segments

Accepted Answer

Differentiated marketing requires creating and maintaining distinct images for each target segment, which can be resource-intensive and complex.

Question 16

A store positioning map for bookstores found various stores occupying each quadrant (classical to contemporary and full-service to self-service).This map illustrates that _____.
A)many different market segments exist
B)a mass marketing strategy could be effective
C)the ideal target market should be classical,full-service
D)few opportunities exist for additional bookstores

Accepted Answer

The fact that various stores are found occupying each quadrant on the store positioning map indicates that there are different market segments with varying preferences and purchasing behaviors. This presents an opportunity for bookstores to target specific segments with tailored products and services.

Question 17

If selling expenses equal 40 percent of a retailer's annual sales,its selling efficiency would be _____.
A)20 percent
B)40 percent
C)60 percent
D)80 percent

Accepted Answer

Selling efficiency is calculated as (Annual Sales - Selling Expenses) / Annual Sales x 100%. In this case, if selling expenses are 40 percent of annual sales, then the retailer's selling efficiency would be (100% - 40%) = 60%.

Question 18

Operations standards are most rigid and the choice of suppliers is most restricted in which ownership and management alternative?
A)franchise
B)buying an existing business
C)starting a new business
D)partnership

Accepted Answer

Franchise operations typically involve strict adherence to standardized operations standards established by the franchisor. Franchisees are typically required to purchase supplies and materials from approved suppliers designated by the franchisor. This allows the franchisor to maintain consistency and quality control across all franchise locations.

Question 19

A retailer operates different store formats to appeal to different groups of customers.This strategy illustrates _____ marketing.
A)target
B)concentrated
C)mass
D)differentiated

Accepted Answer

In differentiated marketing, a company targets different market segments with specific marketing strategies for each segment. By using different store formats to appeal to different groups of customers, the retailer is adopting a differentiated marketing strategy.

Question 20

An excellent retail location,a long-term relationship with suppliers,and access to low-cost capital are examples of a firm's _____.
A)store positioning
B)target market
C)competitive advantages
D)resources

Accepted Answer

These are examples of competitive advantages, which give a firm an edge over its competitors in the marketplace.

Quiz 3: Strategic Planning in Retailing

It is important for franchisors to specify rigid operations standards and to restrict choice of suppliers so that _____.

Which of the following retailers is most likely to use market share as an objective?

Intensive owner participation in a business is most likely to occur when _____.

An integral component of any differentiated marketing strategy is _____.

Stockholder satisfaction is an important objective for a retailer using which ownership and management alternative?

A major retailer studied the image of two of its units,a discount specialty store chain and an upscale specialty store chain,using a positioning map technique.Both of these units' images were clustered in the same quadrant.Which statement best explains this phenomenon?

A retailer attempting to improve its selling efficiency from 60 percent to 70 percent reduced its selling expense budget from $400,000 to $300,000.However,its new selling efficiency was reduced to 50 percent.What happened?

Which of the following is an example of a controllable variable to an independent family-oriented shoe retailer?

An advantage of a centralized management structure to a retail chain is _____.

The division of authority and responsibility in a major retail organization by product categories and geographic areas illustrates a(n) _____.

A heavily diversified retailer requires _____.

An advantage of buying an existing business versus starting a new business is _____.

A retailer that sells to multiple segments should use which management alternative?

A discount department store aims its retailing strategy at a large homogeneous (similar) group of consumers.A wide assortment of goods is offered at popular prices.The retailer utilizes which target market strategy?

While a differentiated marketing strategy allows a firm to diversify,a major difficulty associated with differentiated marketing is _____.

A store positioning map for bookstores found various stores occupying each quadrant (classical to contemporary and full-service to self-service) .This map illustrates that _____.

If selling expenses equal 40 percent of a retailer's annual sales,its selling efficiency would be _____.

Operations standards are most rigid and the choice of suppliers is most restricted in which ownership and management alternative?

A retailer operates different store formats to appeal to different groups of customers.This strategy illustrates _____ marketing.

An excellent retail location,a long-term relationship with suppliers,and access to low-cost capital are examples of a firm's _____.